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Gold: The downside prevails

The gold market had a volatile session on Wednesday with the precious metal rallying after the announcement of QE4 all the way up to 1723, only to reverse the gains, creating a long wick on the upside. Although the market paused its free fall at the strong support level of 1694, it looks like the bears have regained the control of the market. This morning the bears increased the selling pressure dragging the market down at 1697 at the time of writing. The downside potential of the market is further supported by the bearish RSI on the 30 min chart. A downside penetration of 1684 would open the door for 1678 and 1672. In the alternative scenario that the bulls regain control sooner, a break above 1712 would call for 1722 and 1731. Onto the main topics of today, LL eyes will be on the EU summit during European hours. Later in the day a swathe of economic data is due for release from across the Atlantic, with the US PPI and US Retail sales among the most notable.

Dafni Serdari
Market Analyst
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